Eldersburg Business Report
by Doug Howard, president of the
BDG Entrepreneurial Services
January, 2006

Business Owners…Give Yourself a $12,000 Raise!

This is the time of year when many people are anxious to hear from their boss to find out how much of a raise they will get for the coming year. One of the challenges of business ownership is that the raise for the business owner generally comes from improving the profitability of the business. So, as a business owner, how would you like a $12,000 raise?

In business, there are two ways to increase your profits, sell more or spend less. This simple strategy for getting you the raise you deserve includes the latter. In fact, it is not an original idea at all. Think back to Ben Franklin’s insight that “A penny saved is a penny earned”.

So here it is.
1. Look at all of your business expenses in detail
2. Find 20 expenses where you can save $50 per month
3. In a year, that adds up to $12,000 in improved profit

It’s that simple. However, in many cases, business owners are so busy handling problems, servicing clients and looking for new business that there is not time to go through this simple exercise that can have such significant results.

Now, let’s give you some ideas for how you might do this,
• Change staffing and scheduling to reduce some overlap
• Work one shift per month yourself (a good practice for other reasons, as well)
• Eliminate one form or advertising that is not really yielding you results
• Review phone bills (including cell phones) for potential savings
• Review your spending on supplies and find some things you can eliminate
• Check with Chambers and associations to which you belong for discounts that you may be eligible to receive
• Look at interest rates on loans and credit cards for potential savings
• Shop alternatives to your current vendors

Depending on your type of business, you might have to generate as much as $50,000 in additional sales to put an extra $12,000 on the bottom line. But if you take some time right now, run through your expenses and take action early in the year, this could be your best chance for a big raise in 2006!

Happy New Year!

May 2005 Eldersburg Business Report - The Truth About Small Business Financing
April 2005 Eldersburg Business Report - Eldersburg: A Great Place to Start a New Business

Doug Howard is president of the BDG Entrepreneurial Services, and founder of Start-Up Carroll, a group helping small businesses in Carroll County get started.

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